Asian Stocks Rise as Phone, Electronics Companies Gain

Asian stocks rose, with the regional benchmark index extending its rally to a six-month high, as phone carriers and electronics manufacturers advanced.

Singapore Telecommunications Ltd. climbed 1.6 percent as Southeast Asia’s biggest phone carrier agreed to sell part of its stake in Singapore Post Ltd. to Alibaba Group Holding Ltd. Singapore Post jumped 8.7 percent to a record. Samsung Electronics Co., the largest maker of smartphones, added 2 percent inSeoul after unveiling a prototype health-monitoring wristband. BHP Billiton Ltd., the world’s No. 1 mining company, dropped 1.2 percent in Sydney as copper futures declined.

The MSCI Asia Pacific Index (MXAP) rose 0.2 percent to 142.21 as of 11:07 a.m. in Hong Kong. The gauge is headed for its highest close since Nov. 19 and a 3.6 percent gain in May, its biggest monthly increase since September. The regional benchmark earlier fell 0.2 percent after Japan reported a worse-than-estimated drop in retail sales for April.

Investors “should not read too much into the April retail sales numbers,” Vasu Menon, vice president of wealth management in Singapore at Oversea-Chinese Banking Corp., said on Bloomberg Television. “It turned out to be worse than expected. As we progress into the second quarter and third quarter, some of the negative impact from the Japanese sales-tax hike will wear off.”

Japan’s Topix index added 0.1 percent, erasing an earlier loss of 0.4 percent. The nation’s retail sales fell 13.7 percent in April from March, the most in at least 14 years after the first consumption-tax increase since 1997 depressedconsumer spending. The drop was worse than a forecast 11.7 percent decline by analysts in a Bloomberg survey.

Regional Gauges

China’s Shanghai Composite Index was little changed, while Hong Kong’s Hang Seng Index gained 0.5 percent and the Hang Seng Enterprises Index of mainland shares traded in the city increased 0.7 percent.

Singapore’s Straits Times Index climbed 0.8 percent, heading for its highest close in a year. Morgan Stanley raised its rating on Singapore shares to overweight from equal-weight, citing stabilizing economic growth and limited earnings risks, analysts led by Yang Bai wrote in a report to clients.

South Korea’s Kospi index slid 0.1 percent. The nation’s current account surplus narrowed to $7.12 billion in April from a revised $7.29 billion in March, data released by the Bank of Korea today showed.

New Zealand’s NZX 50 Index fell 0.2 percent. Australia’s S&P/ASX 200 Index (AS51) was little changed and Taiwan’s Taiex index slipped 0.1 percent. Markets in Indonesia are closed for a holiday.

Source: Bloomberg

Int'l project helps Chinese villagers face natural disasters

A flood preparedness drill saw a siren cry for a couple of minutes in the small village of Gaoqiao in east China's Jiangxi Province on Wednesday afternoon.

Soon, villagers rushed out of their houses with children in their arms. They ran toward a shelter in the village, with a dozen volunteers arriving to help transport seniors, women and children to a safer location.

At the same time, firemen searched the village for those left behind and police cordoned off the entrance of the village.

This was an initiative aimed at preparing Gaoqiao to evacuate in case of a flood. It formed part of the community-based disaster management (CBDM) program, sponsored by the United Kingdom and featuring participation from China, Bangladesh, Nepal and United Nations Development Programme (UNDP).

Three counties in China have carried out the program. They are Yongxin County of Jiangxi, to which Gaoqiao Village is attached, Jiaojiang District of Taizhou City in east China's Zhejiang Province and Mangshi of southwest China's Yunnan Province.

Yongxin was chosen because it has been haunted frequently by floods. The other two were picked for their susceptibility to typhoons and earthquakes.

Since the program started in January 2013, villagers in Gaoqiao have taken part in two other similar drills.

"I feel more calm and prepared after the drills. If a flood really came, I would know what to do and what not to do," said Zhu Yu, a housewife in her forties.

Villagers used to just react based on their experience when flooding hit.

Regular drills have helped them prepare psychologically and all government departments receive good training and improve their capacity, said Hu Juan, a county official.

Mary Hunt, of the UK's Department for International Development, observed the drill with government officials and experts from China, the UK, Bangladesh, Nepal and UNDP representatives.

"This is a comprehensive disaster control drill. All aspects of disaster control are included in this drill, especially communication work, which is the most important issue," Hunt said.

Besides foreign guests, some officials from northeast China also observed the exercise.

Other places that are at risk from natural disasters can also learn from Yongxin's experience, according to Hu.

China has made great progress in setting up a disaster control system since the outbreak of SARS in 2003, said Lai Hongzhou, an official with the Ministry of Civil Affairs.

But the country has so far focused on disaster relief, while more efforts are needed in early warning and preparation for disaster, Lai added. "That's why we need to improve the role of community in disaster control and the public awareness."

Source: Xinhua

China's emerging "two-child generation" faces parenting challenges

After Wang Qian gave birth to her baby girl, her two-year-old son visited her in hospital. Wang passed a present to the boy, telling him, "This is a gift from your little sister."

As a former employee of an educational NGO, Wang has been tactfully preparing her son to accept and love his sister since day one of her pregnancy.

While this is a common issue for parents around the world, readjusting single children to life with a sibling is a novel need in China. With birth restrictions having been relaxed only recently, a new generation of two-child families is emerging in Chinese society.

The new parenting challenge is being placed in the spotlight ahead of International Children's Day on Sunday.

Mei Qixia, a mental health therapist with the Children's Hospital of Chongqing Medical University, says Chinese parents face particular difficulties because the societal norm has come to be that the first child is the only child. Accordingly, they have always got 100 percent of their parents' love and attention.

Until recently. China's family planning policy was introduced in the late 1970s to rein in the surging population by limiting most urban couples to one child.

The restriction was relaxed, first in 2011, when couples in which both members were a single child were allowed to give birth a second time. It was further eased in November, when couples were permitted to have a second child if only one of them was an only child.

To Mei Qixia's relief, young Chinese parents are gaining greater awareness of what it takes to raise two kids.

Such parents, most of them only children themselves, are also acutely aware of the reputation that China's single-child generation has for being self-centered and spoiled. So they are putting more effort into raising children with generosity.

Wang Qian is regarded as exemplary among her fellow moms of two babies who gather to talk in a group set up on online messaging service WeChat.

To adapt her son to having a sibling, Wang bought a variety of illustrated books narrating stories involving brothers and sisters. "I want him to understand that having siblings is a happy thing," she says.

She also played games with her son on a regular basis throughout her pregnancy, even during the most difficult periods.

Now, she continues to teach him that he is loved by his toddler sister, using the mantra "Look, you always put a big smile on your sister's face."

"We want him to feel proud of being a big brother," Wang explains. Indeed, her son does feel that way, often asking people "Isn't my sister cute?'"

Wang also encourages the boy to feed his sister.

Wang's parenting ingenuity pays. "When I take him to kindergartens or training classes, he is often praised by other moms for sharing food and toys, and the moms attribute his virtue to having a sister."

Cao Ruina, a freelance translator in Beijing, gave birth to a baby girl when her first-born son was seven. Having basked in exclusive parental love for seven years, the boy now occasionally feels less adored.

However, Cao says each time he complains about getting less attention, she tells him that his sister is too young to take care of herself whereas he is much more capable.

Cao copes with the challenge by lavishly hailing whatever her son does to care for the baby girl, rather than pointing out his mistakes.

To her gratification, the two kids generally get along well. They play hide-and-seek, watch 'Teletubbies' together, and the boy always insists on pushing the baby stroller.

"He pushes it like a racing car, I'm afraid the girl will get motion sickness," Cao jokes.

Dai Ling, a mother in Chongqing who had a second baby only days ago, now tends to be more forgiving to her elder son. "We hope he will not feel neglected or get the impression that his parents' love for him has changed," she says.

Dai also let their five-year-old boy, Yuyu, name his little brother. Yuyu chose "Snail," after the most endearing and good-hearted character he knows from comic books.

It is because of such successes that Mei Qixia is confident that a new "two-child generation" will grow to be more caring and have better camaraderie than its predecessors.

Source: Xinhua

China: Political advisors pool proposals on industrial overcapacity

- Chinese political advisors on Tuesday made proposals on how to ease industrial overcapacity by better market competition and legislation.

Speaking at a symposium held by the National Committee of the Chinese People's Political Consultative Conference (CPPCC), political advisors suggested that the government should give the market more play in reducing overcapacity in certain industries.

They also urged the government to tighten regulations and adopt stricter environmental, quality and safety control standards in a bid to squeeze out industrial programs with high pollution and low efficiency.

The symposium, presided over by Yu Zhengsheng, chairman of the CPPCC National Committee, is a regular event for members from various fields and backgrounds -- mainly those from non-Communist parties or with no political party affiliation -- to discuss and propose ideas.

Political advisors stressed that, while cutting overcapacity, the government should pay more attention to laid-off employees in companies being phased out and help them get re-employed.

Source: Xinhua

Chinese gov't stresses health care reforms

The Chinese State Council, the country's cabinet, has issued a guideline to boost reforms on health care systems this year, a government statement said on Wednesday.

The guideline puts forward 31 tasks in six fields to deepen health care reforms.

Reforms on public hospitals will be stepped up through adjusting prices of medical services, improving medicine purchasing in county-level hospitals and boosting policies and mechanisms for traditional Chinese medicines, the statement said.

The government will take measures to encourage private hospitals, including lowering access conditions and improving the policy environment for private hospitals.

More efforts will be made to expedite the building of a universal health care system, including improving coverage for serious diseases and developing commercial health care insurance, the statement said.

Source: Xinhua

Beijing court accepts plagiarism case

A Beijing court accepted the plagiarism case of popular Taiwanese romance novelist Chiung Yao against scriptwriter Yu Zheng and five television companies.

Chiung filed a lawsuit at No. 3 Intermediate People's Court of Beijing on Tuesday. She claims the plot of TV series "The Palace: The Lost Daughter" has been almost completely copied without permission from her novel "Mei Hua Lao" (Plum Blossom Scar).

"The Palace: The Lost Daughter" is aired on Hunan Satellite TV on the mainland, while Mei Hua Lao was previously adapted into a TV series in 1993. Chiung Yao is also demanding compensation of 20 million yuan (3.2 million U.S. dollars).

In her complaint, Chiung Yao said the defendants had gained huge profits from plagiarizing her works. She has been writing a new script based on the story of Mei Hua Lao, but the plagiarism has become an obstacle to the shooting of her new TV series and caused her emotional damage.

According to her indictment, Chiung Yao asked Yu and the five television companies to stop broadcasting "The Palace: The Lost Daughter" on both TV and the Internet, or releasing any copies of the TV series, and asked Yu to make a public apology.

The defendants have also been asked to cover all the plaintiff's legal fees.

Source: Xinhua

U.S. Treasurys Rally, Sending 10-Year Yield to 2014 Low

        The WSJ reports,"a roaring rally in the prices of U.S. and European government bonds sent yields on Treasurys and other ultrasafe debt to 2014 lows, underscoring continued investor uncertainty over the pace of global economic growth.

In late afternoon trading, the 10-year U.S. Treasury note was up 21/32 in price to yield 2.443%, according to Tradeweb. The yield sank as far as 2.432%, its lowest level since June 2013. Bond yields fall when prices rise.

Demand was equally strong across the Atlantic, amid expectations that the European Central Bank could loosen monetary policy as soon as next week. The yield on 10-year German bunds fell 0.05 percentage point to 1.285%, the lowest since May 2013. The yield on 10-year U.K. gilts fell 0.09 percentage point to 2.549%.

Traders said the rally was driven by a surprise uptick in Germany's unemployment as well as typical month-end buying by fund managers to better align their portfolios with underlying indexes. A Treasury price rally in 2014 that has brought the 10-year yield down from 3% at the end of 2013 has left many fund managers holding smaller positions in U.S. debt than market benchmarks.

"The buying [in U.S. Treasurys] is being driven by relative value, rather than a need for yield," said Jake Lowery, portfolio manager at Voya Investment Management. "Global fixed income looks relatively expensive" compared with U.S. Treasurys.

Mr. Lowery points to the yield difference between U.S. and German 10-year debt. The U.S. offers about 1.15 percentage point in extra yield versus Germany, a historically large premium.

Wednesday's rally wasn't limited to debt perceived as safest by investors. Yields on bonds issued by economically weaker European nations such as Spain, Italy and Portugal also declined. Spain's 10-year yield fell as far as 2.793%, a record low.

"We've had a rally in some other sovereign debt markets, making Treasurys look cheaper," said Gary Pollack, head of fixed-income trading at Deutsche Bank's private wealth-management unit.

"The market in general has been caught off guard by the strength in Treasurys this year," Mr. Pollack said, adding that he doesn't see yields sinking much further from here. Like many others, Mr. Pollack sees the 10-year yield ending the year around 3% as U.S. growth accelerates into year-end.

With many sellers crowded around the 2.42% mark on the 10-year note, traders don't see the yield falling significantly past that point without a new round of soft data.

J.P. Morgan's weekly Treasury client survey showed short positions ramping back up to 35% from 24% last week. Neutral positions fell from 66% to 48%, reflecting the fewest fence-sitters since October 2010.

A five-year Treasury auction Wednesday attracted mediocre demand.

The soft auctions show how there are limits to the seemingly insatiable demand for U.S. Treasurys. While investors question the outlook on global growth, data at home have been improving, which raises worries among bond investors about the Federal Reserve increasing rates.

Fed officials, including Atlanta Fed President Dennis Lockhart overnight, have assured that rates will remain low for some time to come to support the economy. But should growth accelerate and inflation perk up, the rally in bonds now only sets up risks for a bigger selloff later on".

WSJ: Emerging Markets Bounce Back Investors Return to Assets Sold in Winter Slide

           The WSJ reports,"uneven stock indexes and low bond yields in the U.S., Europe and Japan are pushing waves of investor cash into markets from Brazil to South Africa that suffered big losses as recently as this past winter. Government-bond yields in the U.S. and Germany hit 2014 lows on Wednesday in response to the latest signs of soft Western growth.

Many investors are focusing on places such as India and Indonesia, where growth is healthy, economic overhauls are beginning and business-friendly leaders are taking power. Other markets are doing well even though change is more of a hope. In Thailand, one of the best-performing markets in Asia this year, a military coup last week barely rattled investors, who have largely stayed put.

The speed with which investors appear to have forgotten losses of up to 30% in some markets has been startling. Money is flowing back into emerging markets at the fastest pace in more than a year.

Mutual and exchange-traded funds focused on emerging markets added a net $13.2 billion in April and May, according to data from EPFR Global through May 26. That is the biggest two-month rise since February and March 2013, and follows 10 straight months of net selling.

Some of the world's best performers this year are members of the so-called fragile five, countries that have been seen over the past year as especially vulnerable to the end of central-bank stimulus. India's market is up 16% this year, largely as a result of hope that the election of reformist Prime Minister Narendra Modi will bring change, Indonesia is up 17%, and Brazil's main index has risen more than 16% in just over two months. Russian stocks have rallied 14% in the past month; the market is down just 3.2% since tensions escalated in Ukraine in mid-February.

On Friday, MSCI's emerging-markets stock index reached its highest level since October. The index is up 3% this year, compared with a 2.8% gain in MSCI's global index.

Investors have also snapped up risky bonds after interest rates in developed markets unexpectedly fell this year as economic growth stalled. Barclays PLC's index of dollar-denominated emerging-market debt has returned 6% this year, compared with 2.6% for U.S. Treasurys.

Emerging-market countries have been happy to satisfy investor demand by going on a bond-issuing spree. Their governments have issued $63 billion in debt, on pace to tie the previous record, set in 2012, according to Dealogic.

The move into emerging-market currencies, stocks and bonds marks a reversal of outflows of $60 billion in early 2014 that resulted from increasing political tensions in Turkey and worries that some countries had grown dependent on the flood of cash generated by central-bank stimulus.

Weaker growth in the U.S. and Europe has made it clear that stimulus—which has boosted asset prices around the world—won't be rolled back quickly. And growth has held steady in most emerging markets. The International Monetary Fund expects developing economies as a group to grow by 4.9% this year, compared with 2.2% in advanced economies.

The fact that emerging markets are illiquid and vulnerable to quick turns in sentiment, often driven by fear of being the last investor left, makes them riskier.

Another risk is a further slowdown in China, which is a major buyer of the commodities sold by countries such as Indonesia, Brazil and Chile. Chinese growth is running at its slowest pace in two decades and markets there are down as investors grow wary of a real-estate bubble, the slow pace of economic overhauls and a creaky financial system.

The best-performing markets this year are being driven by improving economies and reform efforts".

East Ukraine city largely calm after battle, rebels seek Russian help

Relative calm returned to the streets of Donetsk on Wednesday after the biggest battle of the pro-Russian separatist uprising in eastern Ukraine, a conflict transformed by the landslide election of a pro-European leader who vowed to crush the revolt.

Reuters reporters heard sounds of distant gunfire coming from the south of the city and local media reported brief outbreaks of fighting on the outskirts, although this could not be independently confirmed.

However, this appeared minor compared with on Monday and Tuesday when government forces killed dozens of rebel fighters in an assault to retake Donetsk International Airport, which the rebels had seized the morning after Ukrainians overwhelmingly elected Petro Poroshenko as president.

Pro-Moscow gunmen have declared the city of a million people capital of an independent Donetsk People's Republic. On Wednesday their leader Denis Pushilin appealed again for Russia's help. "The residents of the Donetsk People's Republic are on the verge of a humanitarian catastrophe," he said. "We are Russians and this is precisely why they are killing us. We want to become part of Russia."

In Moscow, Russian Foreign Minister Sergei Lavrov accused the West of pushing Ukraine into "the abyss of fratricidal war", and reiterated his call for an end to Kiev's military offensive. His ministry urged Kiev to let it send humanitarian aid to civilians trapped by the fighting in eastern Ukraine.

The rebels' plight puts pressure on President Vladimir Putin to act, even though he has reduced the number of forces he has massed on Ukraine's eastern border and has said he would recognise the outcome of Sunday's election in Ukraine.

Rebel fighters were strengthening their barricades with sandbags on the road to the airport near the hulk of a truck where many of them were killed by government fire on Monday.

The assault was the first time Kiev has unleashed its full military force against the fighters after weeks of restraint. Morgues were filled on Tuesday with bodies of rebel gunmen, some missing limbs.

The separatist authorities say as many as 50 died, including a truckload of wounded fighters blasted apart as they were driven away from the battlefield. The government said it suffered no losses in the operation, when its aircraft strafed the airport and paratroops landed to reclaim it.


A STATE OF WAR

Poroshenko, 48, a billionaire confectionary magnate who became the first Ukrainian since 1991 to win the presidency outright in a single round of voting, repeated his promise to restore government control rapidly over secessionist-held areas.

"We are in a state of war in the east. Crimea is occupied by Russia and there is great instability. We must react," he told Germany's Bild newspaper.

"We will no longer permit these terrorists to kidnap and shoot people, occupy buildings or suspend the law. We will put an end to these horrors – a real war is being waged against our country," said Poroshenko, who is expected to be inaugurated within two weeks.

His swift offensive has thrown down a challenge to Putin, who made defending Russians in other parts of the former Soviet Union a pillar of his rule since declaring his right to use military force in Ukraine in March.

“I have no doubt that Putin could end the fighting using his direct influence,” Poroshenko said. “I definitely want to speak with Putin and hold talks to stabilise the situation.”

Moscow says it is willing to work with Poroshenko but has no plans for him to visit. However, Poroshenko will attend commemorations of the 70th anniversary of the World War Two

"D-Day" landings in Normandy, his office announced on Wednesday, possibly creating an opportunity to talk.

French officials said Putin and Poroshenko would both attend a lunch on June 6 along with leaders including U.S. President Barack Obama, German Chancellor Angela Merkel and Polish President Bronisław Komorowski, but could not confirm whether the two would meet. [ID:nL6N0OE23P]

While calling for an end to Kiev's military campaign, Putin has also announced the withdrawal of tens of thousands of Russian troops he had massed on the frontier. A NATO officer said on Wednesday thousands of Russian troops had indeed been pulled out, although tens of thousands were still in place.

In Berlin, Ukrainian Prime Minister Arseny Yatseniuk called on Moscow to stop rebels entering his country. "A number of trucks full of live ammunition, full of Russian-trained guerrillas crossed the Russian border into Ukraine," he said.

"We ask Russia and Putin to block the border to Ukraine ... If Russia is out of this game we can handle this situation in a week, but as they are supporting and financing them, and providing them access to Ukrainian territory, this creates huge difficulties for us."

Moscow denies that it is behind the rebellion.

Although many in eastern Ukraine are sceptical of the government in Kiev, opinion polls have shown most favour some sort of unity with Ukraine, despite referendums in Donetsk and Luhansk staged by the rebels on May 11 that recorded a vote for independence. The majority in the east describe themselves as ethnic Ukrainians who speak Russian as their primary language.

Source: Reuters

Thai ministry sparks alarm with brief block of Facebook

Thai Facebook users were alarmed on Wednesday when the Information Communications Technology (ICT) Ministry blocked access to the site at the request of the military, but the junta blamed the brief shutdown on a technical problem.

Tweets, email and instant messenger traffic went into overdrive as confused users rushed to find out what had happened to Facebook, a site used by millions of Thais but inaccessible for about 30 minutes in the afternoon.

A senior ICT ministry official confirmed the site had been blocked to thwart the spread of online criticism of the military in the wake of a May 22 coup.

"We have blocked Facebook temporarily and tomorrow we will call a meeting with other social media, like Twitter and Instagram, to ask for cooperation from them," Surachai Srisaracam, permanent secretary of the Information and Communications Technology Ministry, told Reuters.

"Right now there's a campaign to ask for people to stage protests against the army so we need to ask for cooperation from social media to help us stop the spread of critical messages about the coup," he said.

Small protests have taken place daily against the regime, organised mainly on social media, testing the military as it seeks to assert its influence over the media and curtail dissent.

The junta has banned gatherings, imposed a curfew, arrested scores of activists and politicians and told print and broadcast media to refrain from critical reporting of the military. Foreign news channels like CNN, BBC and Al Jazeera have been blocked.

Small, brief protests have taken place in Bangkok as well as the northern and northeastern strongholds of the ousted government, erupting more like flash mobs than political rallies.
The military has also warned people not to spread what it considers provocative material on social media.

Source: reuters

Mercedes allows Chinese to peek under hood in Asia growth push

 Battling to catch up with German rivals in China, luxury carmaker Daimler is shifting gears, giving local authorities unprecedented access to new Mercedes models and even tailoring engines destined for its home market to Chinese regulations.

For years, Daimler has lagged Audi and BMW in the world's biggest car market. Last year, Mercedes-Benz, the company's premier luxury brand, sold 228,000 cars there, compared to nearly 492,000 for Audi and over 362,000 for BMW.

The reasons for this are varied.

For years, Daimler harboured doubts over the sustainability of growth in China. German labour union resistance to shifting production out of Daimler's main factory in Sindelfingen also played a role.

Another key factor has been Daimler's more cautious approach to sharing technological know-how due to fears of piracy. This prevented the company from deepening its footprint in China, where foreign automakers are required to work with local companies, at a time when its rivals were going all-in.

Now this is changing - in part because the Chinese have taken steps to crack down on copyright violations, but also because Daimler executives have realised there is no alternative to closer cooperation if they are to make up lost ground in a market that continues to post impressive growth rates.

This year, Daimler is starting production of its newest C-Class in China as well as Germany, a step-change for a manufacturer that had previously delayed local Chinese production of new models by months.

Beijing Benz Automotive Co. (BBAC), the joint venture company Daimler runs with Chinese partner Beijing Automotive Group Co., is also constructing a new production line for the compact GLA model.


TRANSFERRING KNOW-HOW

To get permission to build both cars locally, they need to undergo a 160,000 kilometre emission durability test and a regulation test with Chinese authorities. These can take up to a year.

As part of this process, Mercedes is allowing Chinese officials to take samples of components and make detailed measurements of its newest cars.

"To put it bluntly, we are transferring know-how," said Rene Reif, head of engineering and manufacturing at Beijing Benz.

Today, Mercedes-Benz GLA prototypes are parked at a brand new research and development centre built for BBAC. And a new C-Class, code named V205 is propped up on vibrating pillars to undergo final "bust squeeze and rattle" testing before its looming launch in China.

Frank Deiss, president and CEO of the joint venture, says the Chinese-made cars will have the same build quality as a Mercedes assembled in Bremen or Rastatt.

To tap China's potential more effectively, Daimler recently moved its Mercedes-Benz Advanced Design Centre from Japan to Beijing.

Its main research and development activities for Mercedes remain in Germany, but China's influence is increasing, even on Daimler's home turf.

The AMG GT for example, a sports coupe being developed in Affalterbach, Germany, is having its engine size reduced to avoid China's progressive taxation thresholds.

"The GT was developed in part with the new tax in mind," AMG Chief Executive Tobias Moers said, explaining that the car will have an 8 cylinder engine with a capacity of just below four litres because of the Chinese tax.


KEY BATTLEGROUND

Daimler only started making Mercedes-Benz cars in China in 2006, reaching production capacity of 120,000 vehicles last year. Audi, which has been making cars there since 1988, surpassed that level in 2007.

If demand continues to rise, Daimler says the capacity of its Beijing factory can be ramped up to make 350,000 cars.

Asia remains the key battleground in Daimler's fight to reclaim the crown of the top-selling maker of luxury cars in the world. The last time Mercedes held the title was in 2004.

Last year, BMW led the pack with 1.65 million units sold worldwide. Audi was next at 1.57 million and Daimler in third place, with 1.47 million Mercedes-Benz branded cars sold.

For all three premium manufacturers, the biggest growth came from China. Mercedes-Benz saw China sales jump 27 percent last year, BMW rose 19 percent and Audi 21 percent.

Daimler says Chinese clients want top-of-the range models and that this is the main way for Mercedes-Benz to increase its market share in China which stands at around 1.5 percent, compared to around 5 percent in Europe or more than 15 percent in Singapore and Hong Kong.

Daimler is counting on China to outgrow Western Europe, North America, and Japan because the Chinese market still has fewer than 74 cars per 1,000 inhabitants compared with 562 in Germany and 742 cars per 1000 inhabitants in the United States.

The pace of Daimler's expansion ambitions has led the company to train Chinese staff using the German model of vocational training and send China-based staff to Germany to acquire specialist skills.

In 2012, about 100 Chinese high potential employees received training on how to build engines at the Daimler factory in Untertuerkheim. Daimler is also opening a training centre for dealership staff.

Wang Lingyu, a general manager for vehicle quality at Beijing Benz, said that apart from taking part in weekly conference calls with Daimler's German factories, she makes regular trips there too.

Concerns that closer cooperation might open the door to piracy by Chinese manufacturers have been mitigated by better protections, says Thomas Weber, the Daimler board member in charge of research and development.

With rip-offs less likely to be tolerated, Daimler is stepping on the gas in China, even with its most cutting edge technologies.

"Innovations that are introduced late, are of no use," said Weber.

Source: Reuters

China optimistic of finding gas off Vietnam, could test ties further - experts

A Chinese oil rig whose deployment to waters claimed by Vietnam early this month triggered a rupture in ties has a good chance of finding enough gas to put the area into production, Chinese industry experts said.

That would give China its first viable energy field in the disputed South China Sea, as well as make it a source of friction with Hanoi for years to come.

For now, China has said nothing about the potential of the area. The first round of drilling had been completed, the rig operator said on Tuesday, without giving any results from the tapped wells. [ID:nL3N0OD0XI]

The $1 billion deepwater rig owned by state-run China National Offshore Oil Company Group (CNOOC Group), parent of flagship unit CNOOC Ltd <0883.HK>, is scheduled to explore until mid-August.

"The place where the rig is drilling at the moment is likely to be a gas field. China conducted three-dimensional geological surveys before moving the rig there," said Wu Shicun, president of the National Institute for South China Sea Studies, a Chinese government think-tank on the southern island of Hainan.

"China is pretty confident ... otherwise they wouldn't start drilling," added Wu, a leading expert on China's ambitions in the South China Sea.

China National Petroleum Corporation (CNPC), the dominant oil and gas producer in China, owns the block being drilled but has given it no name, Chinese officials said. The world's largest energy user imports nearly 60 percent of its oil needs and more than 30 percent of its natural gas.

Source: Reuters

BlackRock CEO says leveraged ETFs could 'blow up' whole industry (Stay Away)

BlackRock Inc Chief Executive Officer Larry Fink said on Wednesday that leveraged exchange-traded funds contain structural problems that could

"blow up" the whole industry one day.

Fink runs a company that oversees more than $4 trillion in client assets, including nearly $1 trillion in ETF assets.

"We'd never do one (a leveraged ETF)," Fink said at a Deutsche Bank investment conference in New York. "They have a structural problem that could blow up the whole industry one day."

Fink spoke during a conversation with Deutsche Bank co-CEO Anshu Jain in a broader discussion about regulating financial companies. ProShares, a leading leveraged ETF firm, disagreed with Fink's remarks.

"Leveraged ETFs are well regulated, transparent products and there is no credible evidence that they have any harmful effect on the markets or our industry," said Tucker Hewes, a spokesman for ProShares.

Leveraged ETFs account for 1.2 percent of the $2.5 trillion in global ETF assets under management. At the end of April, there were nearly 270 leveraged ETF funds with $30.3 billion in assets, said Deborah Fuhr, managing partner of ETF research firm ETFGI LLP.

A leveraged ETF uses financial derivatives and debt to amplify the returns of an underlying index. Some leveraged ETFs have become more aggressive, ramping up risk and potential returns, as the ETF industry gains popularity with individual and institutional investors.

Leveraged ETFs have attracted $1.8 billion in net new assets during the first four months of 2014, Fuhr said.

They are showing up more as buy-and-hold investments in the portfolios of retail investors, as financial advisers grow more comfortable recommending them, and first gained a foothold among traders who wanted an investment vehicle to make fast and enhanced bets on big index moves or the direction of gold prices, for example

Last year, when the Standard & Poor's 500 Index rose 32 percent, the $348 million Direxion Daily S&P 500 Bull 3x Shares ETF gained 118.9 percent, or nearly quadruple the S&P 500's gains.

Last month, Direxion Funds launched two leveraged ETFs with three times exposure to the daily direction of gold prices. Direxion Daily Gold Bull 3X Shares ETF , for example, seeks 300 percent of the daily performance of the Comex Gold Futures benchmark.

The industry's largest leveraged ETF is the ProShares UltraShort 20+ Year Treasury , which has about $4 billion in assets.

Fink said he believes regulators should focus on the structure of financial products.

"If you want to create a safer and sounder marketplace, it has to be at the product level," Fink said.

U.S. Securities and Exchange Commission staffers have issued warnings about leveraged ETFs, though no action has been taken to curb their availability. Regulators say individual investors may not realize that the investment products are designed to achieve their performance objectives on a daily basis rather than over the long term.

Asian shares consolidate gains, bonds fly high May, 29.

May 29 (Reuters) - Asian shares consolidated their recent gains on Thursday while global bond prices surged, pushing their yields to multi-month lows, both supported by expectations of easy monetary policy.

MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> stood flat near one-year high hit on Wednesday, while Japan's Nikkei share average <.N225> shed 0.5 percent after gains after five straight days of gains.

On Wall Street, S&P500 index <.SPX> snapped a four-session winning streak on Wednesday to end slightly below a record closing high hit on Tuesday, though it hit an intraday record high.

More notable moves were in U.S. and European bond markets. The 10-year Treasuries yield fell to 2.44 percent from 2.52 percent, hitting its lowest level in almost 11 months.

Prior to that, German 10-year Bund yields fell to one-year low of 1.285 percent following an unexpected increase in German unemployment and a deceleration in the euro zone money supply.

The data reinforced expectations that the European Central Bank will introduce further stimulus at next month's meeting.

On top of rising expectations of easing by the ECB, global share prices were underpinned by the view that the Fed is in no hurry to raise rates even as it is reducing its bond purchases.

"In the past, when share prices rise, bond prices fell. But that no longer applies. We are likely to see a combination of high share prices and low bond yields," said Daisuke Uno, chief strategist at Sumitomo Mitsui Banking Corp.

The euro also hit 3 1/2-month low of $1.3587 as investors braced for likely monetary easing by the European Central Bank next week.

ECB executive board member Yves Mersch ramped up the rhetoric on Wednesday, saying the June 5 meeting could yield a combination of policies to tackle low inflation and low credit growth, but the timing of implementation could vary. [ID:nT9N0NY06O]

That followed similar hints by ECB President Mario Draghi and colleague Ewald Nowotny earlier this week.

Measures being prepared by the ECB are likely to include cutting the deposit rate into negative territory - effectively charging banks to hold cash at the ECB overnight - and bank loans aimed at helping to increase lending to smaller companies.

Even weaker than the euro was the British pound, which has been hit in recent days by a combination of slightly weaker economic data and inklings of nascent political risk to Britain's long-term status-quo after the European election.

The pound fell to a one-month low of $1.6697 on Wednesday and last stood at $1.6713.

As a result, the dollar index <.DXY> edged near its April 4 peak of 80.599, last standing at 80.553.

As the dollar gained, gold slipped to lowest level in almost four months, trading at $1,258.10 an ounce, licking its wounds after suffering its biggest daily fall since mid-December on Tuesday.

Japan & Australia consider submarine deal that could rattle China

Japan will get the chance to pursue an unprecedented military export deal when its defence and foreign ministers meet their Australian counterparts in Tokyo next month.

Japan is considering selling submarine technology to Australia – perhaps even a fleet of fully engineered, stealthy vessels, according to Japanese officials. Sources on both sides say the discussions so far have encouraged a willingness to speed up talks.

Any agreement would take months to negotiate and remains far from certain, but even a deal for Japan to supply technology would likely run to billions of dollars and represent a major portion of Australia's overall $37 billion submarine programme.

It would also be bound to turn heads in China.

Experts say a Japan-Australia deal would send a signal to Asia's emerging superpower of Japan's willingness, under nationalist Prime Minister Shinzo Abe, to export arms to a region wary of China's growing naval strength, especially its pursuit of territorial claims in the East and South China seas.

A deal would also help connect Japanese arms-makers like Mitsubishi Heavy Industries <7011.T> and Kawasaki Heavy Industries <7012.T> to the world market for big, sophisticated weaponry, a goal Abe sees as consistent with Japanese security.

Abe has eased decades-old restrictions on Japan's military exports and is looking to give its military a freer hand in conflicts by changing the interpretation of a pacifist constitution that dates back to Japan's defeat in World War Two.

"There’s a clear danger that aligning ourselves closely with Japan on a technology as sensitive as submarine technology would be read in China as a significant tightening in what they fear is a drift towards a Japan-Australia alliance," said Hugh White, a professor of strategic studies at the Australian National University. "It would be a gamble by Australia on where Japan is going to be 30 years from now."

Australia’s proposed fleet of submarines is at the core of its long-term defence strategy. Although Canberra will not begin replacing its Collins-class vessels until the 2030s, the design work could take a decade or more and each submarine could take about five years to build, according to industry analysts.

A final decision on the type and number of submarines Australia will build is expected to be made after a review due in March 2015.

Australian officials have expressed an interest in the silent-running diesel-electric propulsion systems used in Japan’s Soryu diesel submarines, built by Mitsubishi Heavy and Kawasaki Heavy. Those vessels would give Australia a naval force that could reach deep into the Indian Ocean.

More recently, Japanese military officials and lawmakers with an interest in defence policy have signalled a willingness to consider supplying a full version of the highly regarded Soryu to Australia if certain conditions can be met. These would include concluding a framework agreement on security policy with Canberra that would lock future Australian governments into an alliance with Japan, the officials said.

Source: Reuters

Maya Angelou delivering her inaugural poem, “On the Pulse of Morning,” at the swearing-in of Bill Clinton, the nation’s 42nd president.

Her inaugural poem, “On the Pulse of Morning,” at the swearing-in of Bill Clinton, the nation’s 42nd president.

"Still I Rise",Poem by Maya Angelou, 1928 - 2014

You may write me down in history
With your bitter, twisted lies,
You may trod me in the very dirt
But still, like dust, I’ll rise.

Does my sassiness upset you?
Why are you beset with gloom?
‘Cause I walk like I’ve got oil wells
Pumping in my living room.

Just like moons and like suns,
With the certainty of tides,
Just like hopes springing high,
Still I’ll rise.

Did you want to see me broken?
Bowed head and lowered eyes?
Shoulders falling down like teardrops,
Weakened by my soulful cries?

Does my haughtiness offend you?
Don’t you take it awful hard
‘Cause I laugh like I’ve got gold mines
Diggin’ in my own backyard.

You may shoot me with your words,
You may cut me with your eyes,
You may kill me with your hatefulness,
But still, like air, I’ll rise.

Does my sexiness upset you?
Does it come as a surprise
That I dance like I’ve got diamonds
At the meeting of my thighs?

Out of the huts of history’s shame
I rise
Up from a past that’s rooted in pain
I rise
I’m a black ocean, leaping and wide,
Welling and swelling I bear in the tide.

Leaving behind nights of terror and fear
I rise
Into a daybreak that’s wondrously clear
I rise
Bringing the gifts that my ancestors gave,
I am the dream and the hope of the slave.
I rise
I rise
I rise.

Maya Angelou,Poet and Lyrical Witness of the U.S. Jim Crow South, Dies.

"Maya Angelou, whose landmark book of 1969, “I Know Why the Caged Bird Sings” — a lyrical, unsparing account of her childhood in the Jim Crow South — was among the first autobiographies by a 20th-century black woman to reach a wide general readership, died on Wednesday at her home in Winston-Salem, N.C. She was 86.

Her death was confirmed by her longtime literary agent, Helen Brann. The cause was not immediately known, but Ms. Brann said Ms. Angelou had been frail for some time and had heart problems.

Though her memoirs, which eventually filled six volumes, garnered more critical praise than her poetry did, Ms. Angelou very likely received her widest exposure on a chilly January day in 1993, when she delivered her inaugural poem, “On the Pulse of Morning,” at the swearing-in of Bill Clinton, the nation’s 42nd president. He, like Ms. Angelou, had grown up in Arkansas".

The New York Times

Xinhua: The government will crack down harshly on terror attacks

The government will crack down harshly on terror attacks and maintain lasting social stability and security in the Xinjiang Uygur autonomous region, the top Chinese leadership said on Monday.
The message came one day after the central government launched a one-year campaign targeting terrorism and religious extremism in the region.

President Xi Jinping said at a meeting of the top leadership that the stability of Xinjiang is strategically vital to China's reform and development as well as national security.

The fight against violent terror attacks and religious extremist forces must be a top priority, according to a statement released after the meeting of the Political Bureau of the Communist Party of China Central Committee, the nation's top decision-making body.

"Strike hard and maintain high pressure on the three forces (of separatism, extremism and terrorism) and effectively contain the expansion of terrorist activity into the heartland," the statement said.

A deadly terrorist attack in Urumqi, the capital of Xinjiang, on Thursday killed 39 people and injured 94 others.

Zhang Chunxian, Party chief of Xinjiang and one of the 25 members of the Political Bureau, said in an article in People's Daily on Monday that the struggle against separatism will be long-term, complicated and intense.

The top leaders also pledged to enhance ethnic unity in Xinjiang, create more jobs, provide free and accessible education and improve people's livelihoods.

Nearly 75,000 officials from Xinjiang government departments sent to work in the grassroots have been told to cancel their annual leaves after the latest terror attack.

These officials, as the first batch of the planned 200,000 to be sent to the region, started their yearlong work in villages in March.

Wang Tianyun, 41, a member of the work team from the Xinjiang Women's Federation, had planned to spend International Children's Day on June 1 with her son at home in Urumqi, but she had to cancel her flight.

Wang and her 18 colleagues have visited every villager after they arrived at their workplace - Youkakmalazhad village of Kashgar.

They have helped villagers with cooking, housework and children's education and enriched their cultural lives with performances, said Sun Hua, the team leader.

Source: Xinhua

IMFSurvey: Reform Efforts to Help Sustain Growth in Colombia

     "A sound policy framework and skilled economic management have supported the recovery of the Colombian economy over the past year, said the IMF in its regular assessment of Latin America’s fourth largest economy.

“Colombia’s economic prospects are favorable, and the authorities’ continued efforts to implement key macroeconomic and structural reforms will help sustain growth over the medium term,” said the IMF’s mission chief for Colombia, Valerie Cerra.

Growth rebounds

Real growth rebounded strongly in the second half of 2013, driven by higher public investment and a solid expansion in private consumption. Overall, real economic growth in 2013 averaged 4.3 percent, up from 4 percent in 2012.

In light of slow demand growth during the first half of the year, the IMF welcomed the central bank’s decision to hold the policy interest rate low at 3.25 percent between April 2013 and April 2014. The reallocation of central government spending to provide targeted stimulus (for example, through mortgage interest subsidies) and the use of royalties for investment spending by sub-national governments also supported growth in 2013.

“Job creation was robust, particularly in the formal sector of the economy, and the unemployment rate declined to 9.7 percent in 2013, the lowest mark in the last decade,” added Cerra.

At the same time, inflation remained well within the 2–4 percent target range, thanks to well-anchored inflationary expectations.

Favorable outlook

Colombia’s economic outlook is favorable. The economy is projected to grow at around potential—estimated at 4½ percent—in 2014 and beyond. Inflation is expected to remain low, as the authorities are committed to adjust the policy rate as necessary to keep inflation within the target range.

Colombia remains exposed to external risks due to potential spillovers in commodity markets, financial markets, and trade with partner countries. While a pickup in advanced countries’ growth would benefit Colombia, downside risks associated with emerging markets and geopolitical tensions have increased over the past year.

“The authorities have ample policy space to counteract the negative effects of any shocks. Colombia also has a comfortable level of international reserves, reinforced by its access to the IMF’s Flexible Credit Line, which provides insurance to countries with very strong policies and track records,” pointed out Cerra".